Of 180 days given for the issue to get resolved, only 90 days are left and failing to resolve it within the given time would make liquidation inevitable
Bankrupted due to massive debt charges, Aircel is heading to the much-feared liquidation stage as the time for the company to complete its insolvency process under the Insolvency & Bankruptcy Code, 2016, has almost reached its end. Earlier on February 28, 2018, Aircel and its two units had filed for bankruptcy in the wake of competition in the telco market amid failing to pay debts.
Around 3,000 Aircel employees are unpaid since March
Aircel’s shareholders and lenders – State Bank of India, Bank of Baroda and Punjab National Bank, attended a meeting with Aircel last week. In the event, the lenders had declined the telco’s proposals to sell the latter’s optic fibre network and scrap and pay a certain 15 days of April salaries to 3,000 employees who have not received their salaries since March this year.
The meeting was organised by Deloitte’s Vijaykumar V Iyer, the interim resolution professional and was attended by Aircel’s senior management and lenders. “The situation is very grim since only a few days are left and there is no sign of any asset sale. Questions are being raised if enough is being done for the asset monetisation programme,” said an executive who had attended the meeting.
Out of 180 days, only 90 days are left to resolve and avoid liquidation
When Aircel and its two units – Dishnet Wireless and Aircel Cellular, had filed for bankruptcy on February, the move had caused worries to around 5,000 employees and the telco’s vendors and distributors as well. In fact, license fees, spectrum charges and taxes were also due to be paid to the government. However, the company had stated that filing for bankruptcy was not aimed for liquidation in the future but was an, in fact, an effort to resolve the current scenario keeping in mind the best interests of its employees, distributors and vendors and keep the company existent.
However, with debt charges of Rs 50,000 crore – out of which Rs 19,000 crore is to be paid to financial lenders, it looks like the telco has got a long way to cover. On the other hand, out of the 180 days that Aircel was provided to fulfil the insolvency, only 90 days are left. Although another 90 days can be given, in case the company fails to resolve the matter within the new prescribed period, liquidation is confirmed.
After admitting Aircel’s plea for bankruptcy on March 8 after the telco filed for bankruptcy on February, the National Company Law Tribunal said that Aircel and its two units along with fibre, spectrum and other assets worth Rs 32,000 crore can save the company from liquidation.